Bangladesh Safety Accord

1. Bangladesh Safety Accord Briefing by Judy Gearhart Executive Director, ILRF June 4, 2013

2. How Accord was achieved… • Global labor advocate networks linking brands/retailers to factories in recent disasters • Focusing attention on individual brand responsibility, failure of industry CSR programs, small cost of saving lives • Broad support – Bangladesh unions, US and European unions, NGOs, online campaigners, student activists • Key players: NGOs and unions in Bangladesh, Europe, US and Canada

3. The Accord: Unprecedented Commitments • Thorough, independent inspections with full public reports • Brands/retailers must require factories to undergo all necessary renovations and help with financing • Brands/retailers must cease business with any factory that refuses (*through a guided process) • Brands/retailers must make 2-year commitment to safe factories • Central role for workers and unions: union access, OHS committees, right to refuse dangerous work • All commitments binding and enforceable

4. Implementation Implementation plan in 45 days Brands/Unions/NGOs convened in Geneva on May 23 12-member planning committee focused on swift implementation First priority: inspections and renovations to mitigate most serious widespread hazards

5. Signatory Brands and Retailers 41 signatory companies, from 13 countries H&M – largest producer in Bangladesh Inditex – world’s largest fashion retailer Carrefour – world’s 2nd largest general retailer Most major apparel retailers in W. Europe North America: PVH/A&F/Loblaw/ENYCE Signatories represent: At least 1,500 factories and 1 million workers Gaps: Gap, VF, Walmart, Target, JC Penney, Macy’s, Kohl’s

6. Conceptually: Four Parts to Program: • Agreements on the Structure of the Program • Rigorous Inspections and Remediation • Worker Involvement and Transparency: • Supplier Incentives

7. Agreements on the Structure of the Program

8. Scope of the Project:Brands designate all suppliers to 1 of 3 groups:

9. Governance • Dispute Resolution (para 5): • Steering Committee reviews and decides disputes within 21 days of the petition; • Appeals to that decision then move to an arbitration process, which is to be enforceable in a court of law of the domicile of the signatory company • Administration and management: to be developed by the Steering Committee (SC will have 3 company and 3 union signatories) in consultation with: High-Level Tripartite Committee of National Action Plan, MOLE, ILO and GIZ.

10. Financial Support • Brands fund SC, and work of the Safety Inspector and Training Coordinator and their teams. • Brands fund proportional to their production in Bangladesh up to a max contribution per company per year being $500,000 for the 5 years (para 24).

11. Credible Inspections and Remediation

12. Credible Inspections: • Inspections done according to rigorous standards • Required public reporting of inspection findings and remediation plan; • Sharing of factory lists and volume data with the Safety Inspector (confidentially) so they can designate suppliers according to its Tier

13. Remediation • Factories to implement corrective actions on schedule • Factories maintain workers’ employment relationship and regular income for up to 6 months in case the factory has to close for renovations; failure to do so may result in termination of contracts. • Brands make reasonable effort to ensure workers who lose employment due to loss of orders or shut down of a factory are offered employment or supported in their placement at a safe factory. • Factories ensure workers can refuse work if he/she has reasonable justification it is unsafe without recrimination

14. Worker Involvement and Transparency

15. Training: • Require factories provide access to training teams to deliver training including the involvement of trade unions and local experts. • All suppliers must have functioning health and safety committees set up according to law and made up of 50% workers chosen by factory union or democratic election

16. Complaints • Safety Inspector establishes worker complaint process, connected to NAP hotline. • [Note: consider how to set up community based support for workers’ complaints and concerns]

17. Transparency and Reporting • Public Reports on Factory Compliance and Remediation: • Written inspection reports within 2 weeks for: factory managers, OSH committee, worker reps and SC • Inspection report and factory remediation plan public in 6 weeks. • Aggregated list of suppliers in program, indicating to which Tier they are designated • Quarterly aggregated reports summarizing industry compliance and review of findings. • A protocol will ensure participating factories are not penalized as a result of the transparency

18. Supplier Incentives

19. Threats and Brand Financing: • Warning system for brands to threaten termination of business due to lack of participation • Brands negotiate commercial terms that ensure it is financially feasible for factories to maintain safe workplaces and/or use alternative means to ensure financial capacity to comply (e.g. loans, investments, direct funding, etc) • Brands maintain order volumes with Tier 1 and 2 factories for at least first two years of this program, provided it’s commercially viable to do so, and the factory continues to meet the company’s terms.